Increasing Medicaid Payments for Certain Primary Care Physicians in 2013 and 2014: A Primer on the Health Reform Provision and Final Rule

To help ensure that access in Medicaid expands to meet anticipated higher demand for care, the health reform law requires states to pay certain physicians Medicaid fees that are at least equal to Medicare’s for a list of 146 primary care services in 2013 and 2014. The idea is to attract new physicians to Medicaid and provide greater support for physicians who already participate. As a result, Medicaid fees paid to certain physicians for primary care services will increase by an unprecedented 73%, on average, in 2013. The cost of fee increase is fully federally funded in 2013 and 2014.

This brief reviews the new provision and explains the Centers for Medicare and Medicaid Services’ November 6, 2012, final rule, which provides the blueprint for implementation of the fee increase. It also discusses implications and policy issues associated with the fee increase.